Manufacturing in Mexico: Adapting to Trade Policy Shifts and AI Integration with Repstronics Jorge Quijano

Tariffs on Monday, none on Tuesday? Welcome to the new reality for Mexican manufacturers navigating the unpredictable trade landscape after recent political changes. In this conversation with Jorge Quijano, Head of Sales for Repstronics at APEX 2025, we dive into the real challenges facing companies operating south of the border—and the innovative strategies they're employing to stay competitive despite the chaos.

Jorge paints a vivid picture of manufacturers literally rushing to build products over weekends and ship on Mondays, only to halt operations when tariffs suddenly shift again. Despite this turbulence, forward-thinking companies are positioning themselves for long-term success. "The companies that are really preparing for that moment are the ones that are going to be stronger," Jorge explains.

The conversation expands beyond tariffs to explore how uncertainty is reshaping investment strategies. Rather than traditional equipment purchases, Repstronics now offers creative alternatives like leasing and rental options that convert CapEx to OpEx. Meanwhile, manufacturers are turning inward, focusing on automation to address persistent workforce challenges and exploring AI implementation—though often without fully understanding what they're asking for. As Jorge notes, "Sometimes we get a request that hey, we need to implement AI, but they don't have an idea of what it is." This mirrors the Industry 4.0 hype cycle that preceded it, though AI may finally help companies properly leverage the data they've been collecting for years.

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Transcript

Mexico's Manufacturing Tariff Challenges

Philip Stoten 0:08

Hello , I'm Philip Stoughton , I'm at APEX 2025 and I am joined by Jorge from Revstronix . Hey , great to see you , thanks for taking the time . Thank you for having me Interesting times in Mexico . Since we've had a new president this side of the border . So since we've had a new president this side of the border , it's kind of been tariffs on , tariffs off . People don't really know what's going on . Is it just clarity people want or is there a specific outcome you think Mexico really needs ?

Jorge Quijano, Repstronics 0:40

Well , currently it's really hard for the customers to really understand what is happening and we as suppliers , we try to be close to the customers , try to support whether changes or changes they are facing . And it's kind of strange the other day I was talking with a customer that they were like building something on the weekend , trying to ship it on Monday and then stop it until the next day because the tariff is on and off .

Philip Stoten 1:03

So it's kind of strange for the customers .

Jorge Quijano, Repstronics 1:05

Yeah so it's obvious that they they have no clear idea what is happening , and it's all of us that we don't have here . But uh , so far , I think the uh companies are really uh trying to set up or be ready . Yeah , I mean , this is going to to solve sooner or later . Yeah , so the companies that are really preparing for that moment are the ones that I think are going to be stronger .

Philip Stoten 1:30

Yeah , they're going to be the most successful

Equipment Investment During Uncertainty

Philip Stoten 1:32

, absolutely Correct . I think there's a degree that , as you say , when you talk to the EMS companies themselves , they've got variability in their demand Because some people are saying ship early , we want to get in before the tariffs , ship this week , because the week before there were tariffs , the week after there might be tariffs again . So there are challenges there . But when I think of it from a Reptronix point of view , particularly on the CapEx side , the temptation is to delay , isn't it ?

Philip Stoten 1:58

It's just to say , let's get some clarity and then we'll get that project signed off and we'll move forward . That creates a kind of a pent-up demand , but it creates a little bit of slowness and inertia in the market .

Jorge Quijano, Repstronics 2:12

Yes , correct , I mean things are getting slow right now for acquiring big equipment or for big SMT lines . However , we are working closer with our partners and suppliers , and also with the customers , to offer some alternatives , just to mention a few . We have some equipment that we can lease or we can rent or we can , I mean , find a way to support the customers in these difficult times .

Philip Stoten 2:37

Yeah , if you can move it from CapEx to OpEx . Often that solves a problem in the short term and when things are the way they should be , yeah , if you can move it from CapEx to OpEx . Often that solves a problem in the short term , and when things are the way they should be , maybe it moves back to the CapEx budget . What I also find when there's times when people are not necessarily in a position to invest in capital equipment , they still want to think about what's next . They still want to think about how they can improve their operational excellence , the performance of their factory . So they perhaps look more inwardly and think more about you know , I don't know maybe software that's going to give them a quality advantage , or maybe something that's going to give them a little

Workforce Optimization and Automation

Philip Stoten 3:12

bit more operational efficiency . Are you having more of those conversations ?

Jorge Quijano, Repstronics 3:15

Yes , actually in the last maybe couple of months we have been discussing about strategies to reduce the headcount or to optimize the headcount . So we are retaking some projects about automation that we were discussing maybe a couple of years ago . So companies are now looking once again how to optimize or how to get the proper headcount , Because you know it's hard for the companies to get skilled personnel . So you add this to the tariffs issue or uncertainty , so it's really hard for the companies to get skilled personnel , so you add this to the tariffs issue or uncertainty , so it's really hard for the customers .

Philip Stoten 3:47

Yeah , I completely understand , and , much as that's something they're doing in the short term because they've got a hiatus , the talent issue is two or three years old and it's not going to go away . Correct , they need to be ready for that . What about the equipment mix you've got ? Are you seeing any new lines ? Come on , have you seen any technology here that you've been really excited about ?

Jorge Quijano, Repstronics 4:07

Yeah , I mean you talked about that the software that we are promoting with some of the brands that we work with , those are aimed to update the efficiency or to update the operability of the companies . So that's a trend that we're seeing with the customers right now .

Philip Stoten 4:27

And are people asking you many questions

AI in Manufacturing: Reality vs Hype

Philip Stoten 4:29

about AI ? Are they curious as to where it can help ?

Jorge Quijano, Repstronics 4:31

Yes , I think they are still curious , but I mean , it's not really that clear for the customers yet . Sometimes we get a request that hey , we need to implement AI , we need to implement industry 5.0 , but they don't have an idea of what it is . So as a supplier , we have to work closely with them to explain what are the capabilities , what are the limits or what we can offer , what is not AI . So we work closely with the customers .

Philip Stoten 4:58

It's interesting , isn't it ? Because if you were at the show six , seven years ago , every booth had an Industry 4.0 logo . Now every booth has an AI logo . It feels like we didn't really deliver on Industry 4.0 . We didn't get across the line . We managed to perhaps get the connectivity and the data out , but we haven't really figured out how to do it . Do you think AI is maybe kind of the accelerant that will get us close to that ? I can't even think about Industry 5.0 because we didn't nail full .

Jorge Quijano, Repstronics 5:29

I think the AI will exploit what the benefits for the Industry 4.0 are in place , because we have data , we collect data , but we are still not in a point to use that data to take better decisions or to inform the land what is happening , that kind of stuff . I think the AI will exploit that data , that information that we get . So we've got now better computers to process information , to take decisions to make analysis , so that will make the work easier for the people in front of the land .

Philip Stoten 6:01

Yeah , the other area I see that people are challenged in is their supply chain . So you know , not actually on the factory floor almost before the components get there ? Is that an area you work in and is that an area you've got solutions

Expanding Beyond the Factory Floor

Philip Stoten 6:14

to help in ?

Jorge Quijano, Repstronics 6:14

Yeah , so actually I mean two years back we usually worked with the line people , with the engineering on the machine , the specification , the capability , that kind of stuff . But now we have a broader approach . So we're working with the suppliers , with the warehouse , to integrate those 4.0 initiatives or AI . So right now we have more people getting involved and we used to talk with the engineering guys . Now we talk with the warehouse guys , with the supply chain guys , with the procurement .

Jorge Quijano, Repstronics 6:48

So the business is expanding to all those areas that usually were just like a black box .

Philip Stoten 6:53

Yeah , I think it's really valuable and I think , from your point of view , being able to go in and have a holistic approach , an overview of the not just the whole line but the business process , is , uh , usually valuable . Oh hey , thanks , so much for your time . Thank you , I hope this um tariff uncertainty is is sorted out , because for me , mexico is one of the best places on earth to do manufacturing . Uh , I look forward to being down there soon and talking again .

Jorge Quijano, Repstronics 7:18

Thank you . Thank you for having me .